Rein v. David A. Noyes & Co.

665 N.E.2d 1199, 172 Ill. 2d 325, 216 Ill. Dec. 642, 1996 Ill. LEXIS 27
CourtIllinois Supreme Court
DecidedMarch 21, 1996
Docket79168
StatusPublished
Cited by345 cases

This text of 665 N.E.2d 1199 (Rein v. David A. Noyes & Co.) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rein v. David A. Noyes & Co., 665 N.E.2d 1199, 172 Ill. 2d 325, 216 Ill. Dec. 642, 1996 Ill. LEXIS 27 (Ill. 1996).

Opinion

JUSTICE MILLER

delivered the opinion of the court:

On March 17, 1993, plaintiffs, Arlie J. Rein, Brenda H. Rein, Robert H. Miller, Donald C. Miller, and Lorraine Fehrmann, filed a 12-count complaint in the circuit court of Kane County against defendants, David A. Noyes and Company (Noyes), a securities dealer, and its agents, John F. Rath and Ronald E. Ainsworth. The complaint alleged that defendants fraudulently misrepresented the character of certain securities that they had sold to plaintiffs in 1985. Plaintiffs sought recovery under various theories of law. The trial judge dismissed the complaint pursuant to section 2 — 619 of the Code of Civil Procedure (Code) (735 ILCS 5/2 — 619 (West 1992)), finding that the claims were barred by the doctrine of res judicata and also by the applicable statutes of limitations. On appeal, the appellate court, with one justice dissenting, affirmed the dismissal of plaintiffs’ complaint. 271 Ill. App. 3d 768. We granted plaintiffs’ petition for leave to appeal (155 Ill. 2d R. 315(a)) and, for the reasons that follow, affirm the judgment of the appellate court.

I. BACKGROUND

On October 11, 1990, the Reins and Millers filed an eight-count complaint (Rein-Miller complaint) in the circuit court of Kane County against defendants, Noyes and Rath. The first four counts contained the Reins’ causes of action, and the last four counts contained the Millers’ causes of action. Counts I and V alleged that the Reins and Millers were customers of Noyes, and that during 1985, on the recommendation of Noyes, through Rath, the Reins and Millers purchased certain securities known as "City of Richmond, Indiana Economic Development Revenue Bonds” (Richmond bonds). The bonds were dated June 20, 1985. The complaint further alleged that Noyes and Rath willfully, fraudulently, and deceitfully failed to inform the Reins and Millers of, and concealed from them, material facts relating to the bonds in violation of sections 12(F) and 12(G) of the Illinois Securities Law of 1953 (Act) (111. Rev. Stat. 1989, ch. 1211/2, pars. 137.12(F), (G)). Specifically, the complaint maintained that Noyes and Rath caused the Reins and the Millers to believe that the bonds in question were governmental, municipal bonds for which the City of Richmond would be liable for payment of principal and interest. In actuality, however, the bonds were high-risk investments in a private hotel project for which the City of Richmond would not be liable for payment of principal or interest. The complaint therefore claimed that the Reins and the Millers were entitled to rescind the purchase of the securities pursuant to section 13 of the Act and recover the full amount paid for the securities plus interest (111. Rev. Stat. 1989, ch. 1211/2, par. 137.13(A)(1)). The complaint additionally alleged that the Reins and the Millers became aware of the fraudulent misrepresentation of the securities in August 1990.

The remaining counts of the complaint were all based on the same factual allegations as counts I and V. However, count II asserted that the Reins purchased the securities on October 30, 1985, while count VI alleged that the Millers purchased the securities on June 20, 1985. Counts II and VI of the complaint sought recovery under a theory of common law fraud and for failure to register the securities and provide a prospectus as required by the Act. Counts III and VII sought punitive damages based on common law fraud. Counts IV and VIII sought recovery on the theory of breach of fiduciary duty.

On December 27, 1990, Fehrmann filed a four-count complaint against Noyes and Ainsworth. Fehrmann’s complaint was based on allegations similar to those contained in the Rein-Miller complaint. Specifically, Fehrmann’s complaint alleged that during 1985, Noyes, through Ainsworth, willfully, fraudulently, and deceitfully induced her to purchase Richmond bonds, dated June 20, 1985. The first count of Fehrmann’s complaint, styled "Count IX,” sought rescission under the same theory as the Rein-Miller complaint and alleged that Fehrmann became aware of the fraudulent misrepresentation of the securities in November 1990. Count X asserted that the sale of the securities to Fehrmann occurred on October 29, 1985. In all respects, the legal basis of each of the four counts of Fehrmann’s complaint was the same as that of the analogous counts of the Rein-Miller complaint. On defendants’ motion, the rescission count of Fehrmann’s complaint (count IX) was consolidated with the Rein-Miller complaint.

Defendants moved pursuant to section 2 — 619(a)(5) of the Code (111. Rev. Stat. 1989, ch. 110, par. 2 — 619(a)(5)) to dismiss the rescission counts of the complaints (counts I, V, and IX) on the ground that the claims were barred by the limitations period contained in section 13(D) of the Act (see 111. Rev. Stat. 1989, ch. 1211/2, par. 137.13(D)). The trial judge subsequently granted defendants’ motion and dismissed with prejudice the counts seeking rescission, finding that they were barred by the limitations period in section 13(D) of the Act.

Following the trial judge’s order, plaintiffs filed a motion for reconsideration and a motion for leave to file an amended complaint. In the motion for leave to amend, plaintiffs sought leave to plead the doctrine of equitable estoppel, which plaintiffs contended overrode the statute of limitations bar. In the motion for reconsideration, plaintiffs argued, among other things, that the trial judge erred in determining that plaintiffs could not plead equitable estoppel in defending against defendants’ statute of limitations argument. The trial judge denied the motions. With regard to the motion for leave to amend, the trial judge noted that any proposed amendment seeking to assert equitable estoppel as a defense would still invoke the provisions of the Act in order to seek rescission of the securities purchases. The trial judge found that equitable estoppel could not be used to override the statutory limitations period because the claims would still be controlled by the limitations period in section 13(D) of the Act. Consequently, the trial judge denied the motion pursuant to the earlier ruling that such claims were barred by the limitations provisions in section 13(D). The trial judge further refused to make a Rule 304(a) finding (155 Ill. 2d R. 304(a)) that there was no just reason to delay enforcement or appeal of the dismissal of the rescission counts.

On August 23, 1991, plaintiffs voluntarily dismissed the remaining counts of their complaints pursuant to section 2 — 1009(a) of the Code (111. Rev. Stat. 1991, ch. 110, par. 2 — 1009(a)). Plaintiffs then appealed the dismissal of the rescission counts. On appeal, the appellate court affirmed the dismissal, finding that the rescission counts were barred by the limitations period in section 13(D) of the Act. Rein v. David A. Noyes & Co., 230 Ill. App. 3d 12 (1992). For purposes of clarity, this appellate court opinion and the proceedings leading up to it will be identified as Rein I.

On March 17, 1993, approximately 19 months after plaintiffs voluntarily dismissed the remaining counts of their complaints, plaintiffs filed a 12-count complaint against defendants. Counts I through IV contained the Reins’ causes of action; counts V through VIII contained the Millers’ causes of action; and counts IX through XII contained Fehrmann’s causes of action.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In re Marriage of Chanen
2023 IL App (1st) 221060-U (Appellate Court of Illinois, 2023)
Rosenbaum v. McConnell
Appellate Court of Illinois, 2023
Galaviz v. Mietus Restoration, Inc.
2023 IL App (1st) 220514 (Appellate Court of Illinois, 2023)
People v. Best
2023 IL App (5th) 220017-U (Appellate Court of Illinois, 2023)
Kilpatrick v. Board of Education of the City of Chicago
2022 IL App (1st) 220002-U (Appellate Court of Illinois, 2022)
William E. Baker, Jr.
C.D. Illinois, 2022
Berry v. City of Chicago
2019 IL App (1st) 180871 (Appellate Court of Illinois, 2019)
Patrick Doherty v. FDIC
Seventh Circuit, 2019
Advanced Physicians, S.C. v. Provena Glenwood Medical Imaging
2018 IL App (3d) 170296 (Appellate Court of Illinois, 2019)
A&R Janitorial v. Pepper Construction Co.
2018 IL 123220 (Illinois Supreme Court, 2019)
Ward v. Decatur Memorial Hospital
2019 IL 123937 (Illinois Supreme Court, 2019)
Tebbens v. Levin & Conde
2018 IL App (1st) 170777 (Appellate Court of Illinois, 2018)
Watkins v. Ingalls Memorial Hospital
2018 IL App (1st) 163275 (Appellate Court of Illinois, 2018)
Taylor, Bean, & Whitaker Mortgage Corp. v. Cocroft
2018 IL App (1st) 170969 (Appellate Court of Illinois, 2018)
A&R Janitorial v. Pepper Construction Co.
2017 IL App (1st) 170385 (Appellate Court of Illinois, 2018)
Venturella v. Dreyfuss
2017 IL App (1st) 160565 (Appellate Court of Illinois, 2017)
The Employees' Retirement System of The State of Hawaii v. Clarion Partners, LLC
2017 IL App (1st) 161480 (Appellate Court of Illinois, 2017)
In re Detention of Lieberman
2017 IL App (1st) 160962 (Appellate Court of Illinois, 2017)

Cite This Page — Counsel Stack

Bluebook (online)
665 N.E.2d 1199, 172 Ill. 2d 325, 216 Ill. Dec. 642, 1996 Ill. LEXIS 27, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rein-v-david-a-noyes-co-ill-1996.